574.D 1/512

The Technical Expert, American Delegation at the Conference on the Limitation of Armament ( Rogers ) to the Secretary of State

Attached hereto is an agreed upon minute covering informal discussions between Mr. Brown, Great Britain, M. Girardeau, France, Messrs. Inada and Yoshino, Japan, and myself.

M. Girardeau, who by the way is an official of the leading French radio Company, was keenly alert to the interests of his company. He urged the desirability of an agreement between the private radio companies of the United States (Radio Corporation), Great Britain, France, and Japan looking toward joint action in the development of radio in China. He clearly sought to make the French station at Saigon the central radio station of Asia with China merely having secondary stations designed to handle traffic to and from Saigon.

Mr. Brown, who is a broad-minded person and who wants to see developed (preferably under government ownership) a comprehensive international network serving all alike, constantly expressed the view that the United States and Great Britain should not stand in each other’s way in China and should urge their respective nationals to waive claims to existing monopolies.

The Japanese appeared to have no definite proposals in mind and appeared willing, providing a use could be found for the Mitsui (Japanese) station erected near Peking, not to press claims to monopolies or special privileges. They were especially interested in the possibility of improving communication services between the United States and Japan and stated they were going home to gather all the available data. They also stated that the Japanese Ambassador was authorized to negotiate with the American government generally regarding electrical communications.

It was agreed that the attached minute should be brought to the attention of the governments concerned with the suggestion that, so far as it goes, it should serve as a basis of policy and of understanding between the Powers.

It might be worth while to send copies of the minute to Tokyo and Peking, as it brings out to some extent the attitude of the other countries.

[Walter S.] Rogers

[Page 840]
[Enclosure 1]

Recommendations of the American, British, French, and Japanese Communications Experts

We the undersigned, experts for Communications attached to the American, British, French and Japanese Delegations to the Washington Conference, have held several informal conversations on the subject of Radio Communication in and with China, and desire to submit the following observations to our respective governments:

(1) The British, French, and Japanese experts have exchanged views for the purpose of bringing about, with the consent of China and of their respective private interests, a cooperative scheme looking to the provision of suitable radio stations in China for the establishment of services between China and other countries. Provision would be made in this scheme for the participation of the nationals of other countries on fair terms. While the scheme would look primarily to the provision of communication services between China and the territories of the countries whose nationals participate, nevertheless communication services would be provided with other countries whose governments gave consent.

The proposed cooperative organization would have no monopoly or exclusive privilege and would be subject to Chinese laws and to such general international agreements relating to communications as China may be a party to.

While it is recognized that the Chinese government may not for some time to come be in position to finance or to develop high-powered radio as a national undertaking, provision would nevertheless be made for the possible purchase by the Chinese government, upon fair and reasonable terms, of stations provided in China by the cooperative undertaking.

It is proposed that the station now being erected near Peking should, upon fair and reasonable terms and with the consent of China, be included in the proposed cooperative scheme. The proposed heads of arrangement are shown in the Annex.

(2) The American expert believes that probably radio communication between China and the United States can best be developed by the erection in China of radio stations primarily concerned in trans-Pacific communications and that such stations preferably should be owned and operated by the Chinese government or by Chinese or American private enterprise and that the existing concession held by the Federal Telegraph Company should serve as a basis for providing Chinese–American service.

While such stations would be employed primarily for the provision of services between China and American territory and North America generally, nevertheless communication services could also [Page 841] be provided with other countries whose governments gave consent. Other foreign owned stations in China might also communicate with American territory, but the American government might well prohibit such exchange of traffic in cases where the foreign enterprise operating in China or the country to which it owes allegiance does not reciprocally permit American owned stations to communicate with its stations.

The existing Federal concession contains no monopoly or exclusive privileges and the stations therein contemplated would be subject to Chinese laws and to such general international agreements relating to electrical communications as China may be a party to.

While it is recognized that the Chinese government may not for some time to come be in position to finance or to develop high-powered radio as a national undertaking, provision should be made in concessions for Chinese-American communication (as in all other concessions) for the possible purchase by the Chinese government, upon fair and reasonable terms, of the radio stations concerned.

(3) The enterprises contemplated by (1) and (2) should be at liberty with the approval of the governments concerned to arrange between themselves for the interchange of traffic and for such other understandings as may benefit their respective interests.

(4) The provision of suitable radio stations in China for communicating with ships at sea is particularly desirable. If foreign owned stations in China are authorized to handle ship and shore traffic, all the interests concerned should cooperate with the Chinese Ministry of Communications with a view to coming to a common understanding regarding such operations.

(5) It appears desirable that the China National Wireless Company be broadened so as to make possible participation of other interests that can contribute patent rights, technical skill, or financial resources with a view to the development in China of factories capable of manufacturing a wide variety of radio apparatus. In conformity with the principle of the Open Door, such a company should not have a monopoly or preferential privileges although it is recognized that the control of patents and the participation in the ownership of the company by the Chinese government may go far toward creating a special situation.

We recommend that the governments whose nationals are interested in the China Electric Company and the Chinese National Wireless Telegraph Company should urge the two companies voluntarily to come to an understanding that will prevent conflicts arising out of their respective manufacturing concessions.

(6) We suggest that the four powers recommend to China that an arrangement be entered into with the cable companies looking toward the continued working, for a limited period after the expiration [Page 842] of their existing contracts in 1930, of the Chinese coast cables and landlines used in conjunction with the companies system, substantially on the basis of the existing working agreements, provided no such arrangement involves any monopoly or preferential privilege and leaves a fair field for electrical communications in China and between China and other countries: the companies to notify the Chinese government that they in turn will immediately withdraw any claim to a monopoly in wireless communication in China or between China and other countries, and thus leave free scope for wireless development, but without preference for wireless as compared with cables and landlines, except that the rates chargeable to the public for communication by wireless may be 25 per cent (or in the case of press traffic more than 25 per cent) lower than the corresponding rates by cable, and that the rate for communication by wireless with America may be as low as the wireless rate to Western Europe—these limits to be reconsidered after 1930.

[Enclosure 2]

Proposed Heads of Arrangement Respecting Wireless in China Agreed to by the British, French, and Japanese Communications Experts

1.
A combination of British, French and Japanese wireless interests to be formed under the general authority of the Chinese Government, and with such financial, technical and other cooperation on their part as may be arranged, for the purpose (1) of constructing such wireless stations and supplying such wireless apparatus as that government may desire it to construct or supply, either against cash payment or against the security of revenue derived from the stations, and (2) of working the stations until paid for or longer if China so desires; the financial basis of the combination to be substantially an equal share for each of the wireless interests in question; the Great Northern Telegraph Company to take a similar share if they so desire. Each interest concerned to have equal representation on the governing body of the combination. Details to be arranged by the several wireless interests in question, under the respective control of their Governments, in consultation with the Chinese Government.
2.
Existing stations or stations in course of construction under concessions to any of the interests individually to be brought under the combination, suitable compensation being paid by the combination in respect of legitimate expenses already incurred.
3.
The Chinese National Wireless Company to be reorganized with the consent of the Chinese Government in such a way as to include [Page 843] the wireless interests above mentioned, and also American wireless interests if they agree, on the basis of an equal share for each nationality; and to endeavor to arrange with the China Electric Company for a mutually satisfactory division of the field of manufacture of apparatus for electrical communication generally.
4.
The Great Northern Telegraph Company to be at liberty either to set up a station in China with the consent of the Chinese government to supplement its Peking-Siberian landlines, on the understanding that such traffic only is forwarded by means of this station as is paid for at the landline rates and would normally pass over these lines; or, as an alternative, to arrange for the use for that purpose of stations erected by the combination.
5.
The combination to arrange for the embodiment of the best radio practice in the stations which it constructs, and for the efficient working of the stations so long as it works them; but subject to these conditions the several wireless interests to take as far as possible an equal share both in constructing and in working the stations. The combination also to arrange, as far as possible, for the opening of services, on suitable terms, with any stations in other countries with which communication can be effected and whose governments give consent.
6.
All wireless traffic between China and other countries to be sent by the most direct route, unless the sender otherwise directs, or unless the direct route is interrupted or congested.
7.
Subject to the concurrence of China, external radio traffic to be exchanged in the interior of China either by radio or by land-line subject to the principle that within the interior of China the landline and radio network will supplement each other.
8.
The combination to secure from China an assurance (1) that she will not permit any stations in China which are not worked by the combination to use wave-lengths unduly near to those in use at stations in China worked by the combination, or otherwise to interfere electrically with the working of the latter stations; (2) that she will not exchange traffic with any competing organization on terms more favourable than those enjoyed by the combination.
9.
Any radio interest of other nationalities which desire to enter the combination, to be allowed to do so with the consent of the original members on a basis representing the capital invested in their undertakings in their own countries as compared with the total capital invested in the undertakings of the original interests in their own countries, provided (1) that no new nationality takes a greater share than each of the original nationalities; (2) that the new interest is able, if desired by the combination, to open a station in its own country for communication with stations of the combination, in such a way as to assure an efficient service between such country [Page 844] and China; (3) that the new interest refrains from competition with the combination in China; and (4) that it uses its best endeavours to secure the consent of its Government to these Heads of Arrangement as a whole.
10.
The three Powers whose wireless interests are originally affected to support diplomatically the arrangements above set forth, and not to support other wireless undertakings in China so long as the conditions remain substantially as at present.